Rivergate: Council admits plan to purchase shopping centre

The local authority has finally admitted its attempt to purchase the shopping centre - six months after it was first revealed in the Times.

North Ayrshire chief executive Elma Murray revealed the sum on Monday morning, following a Freedom of Information request from the Irvine Times into costs incurred for its proposal.

Councillors considered the purchase of the shopping centre during a confidential Special Council Meeting on December 20, 2017 - before the bid to borrow around £55million for the project was rejected by a majority vote.

Elma Murray, Chief Executive of North Ayrshire Council, said: “Now that information has been released under Freedom of Information legislation, I want to take this opportunity to clarify the recommendations put forward by Council officers on the Rivergate proposal.

“We have not been able to do this before now because of a confidentiality agreement with Kennedy Wilson, the current owners, which is a normal condition of this type of negotiation.

“The Rivergate Centre was being considered for sale last year and an approach was made to our Council to consider the purchase.

“Our role as Council officers, regardless of which political party is in power, is to develop proposals to grow our economy, maintain jobs and ensure the commercial success of our area for the benefit of all North Ayrshire residents and businesses. In this case the proposal was in Irvine, and a shopping centre, but equally it could have been any project that protects jobs in North Ayrshire.

“Investment opportunities of this scale and magnitude require a great deal of skill, expertise and experience. Council officers in our legal, finance, property investment, regeneration and economic growth teams were heavily involved in preparing the case for purchase. In addition, we required significant specialist advice to consider the financial viability and benefits of the proposed purchase.

"Every aspect of the Centre’s construction, its leases, future shopping trends and a number of other variables were examined to ensure this was a sound proposal. Divers even checked the concrete under the river.

“The cost of this was £238,000 and is much less than 1% of the purchase price. When you think about it, this approach is similar to the steps anyone would take when buying a house – albeit on a much bigger scale.”

Ms Murray added: “All of the information and advice provided to us was assessed in detail before we put forward our recommendation to purchase. Although any investment will have some risk, in this case there were many advantages to purchasing the Rivergate.

“First of all, the Council has access to low interest loans through the Public Work Loans Board. These loans are only available to local authorities and the interest rate is much lower than that available through commercial lending. Importantly though, we were also able to take on this investment without impacting on our other budgets.

“Another big advantage to this proposal is that the rental income would more than have covered the cost of re-paying the loan. This would have allowed us to set up a fund to invest in other projects across North Ayrshire.

“It was therefore proposed that an initial investment fund of around £12m over the first 10 years be created. Around 65% of the investment fund was to be re-invested into the Rivergate Centre and the immediate surrounding area of Irvine town centre.

“Some of the options included building a new multi-screen cinema (subject to an operator being identified) and a food hall. We would also have had funds to consider the Compulsory Purchases of other properties requiring investment, such as the Forum and Ruby Tuesday’s.

“The remaining 35% of the £12m fund was to be invested in other projects across North Ayrshire and initial consideration was being given to Lochshore in Kilbirnie and Saltcoats town centre.

“Finally, taking control and ownership of such an important asset in our biggest town would have allowed us to consider how to develop it in the future, taking account of changes in retail and leisure.

“Local government has a wonderful democratic process and Elected Members are always entitled to accept or reject officers’ proposals.

“They will therefore still expect officers to explore and bring forward new positive proposals for the benefit of our communities, businesses and the residents of North Ayrshire.”

Ipsoregulated

This website and associated newspapers adhere to the Independent Press Standards Organisation's Editors' Code of Practice. If you have a complaint about the editorial content which relates to inaccuracy or intrusion, then please contact the editor here. If you are dissatisfied with the response provided you can contact IPSO here